If you’ve done your homework, surveyed the market and have the data to prove your position, skip this post. If you believe you understand the market and don’t need to talk to the market to validate your opinions read on. Maybe it’s your ego or your arrogance that prevents you from talking to the market. Maybe it’s fear. Either way, statistically, you’re a train wreck waiting to happen.

Let me walk you through it. You worked in an industry for a number of years. That experience gives you a sense of intuitive understanding of the industry and what makes it tick. More than likely you were in a mid-level position where you had the benefit of seeing life in the trenches. During this time you saw a set of recurring problems and maybe even formulated some technical solutions to address them. You presented your ideas to management, who didn’t embrace your enthusiasm for the problem. You’re frustrated, hurt and maybe angry. You develop an “I’ll show them” attitude and strike off on your own.

In your spare time you develop a prototype and begin to show it to your peers. Your peers give you glowing feedback and reinforce your sense of importance. You are on your way to being rich.

You get introduced to angel investors who are struck by your enthusiasm and command of the problem. They give you the seed capital you need to take your idea to the next level. You hire a few developers with the goal of moving from prototype to commercial ready.

You spend the next 6 months heads-down developing the solution. You know what features need to go into the product. After all, you lived the problem and know how to fix it. There’s no time to survey the market and talk to decision makers. You know the problem and you have the answer.

Three months into the project you begin to get feedback from the team about specific features that might be missing. They’re smart guys so they’ve started poking around to identify competitive alternatives and what they’re offering. You’re annoyed by the distraction. The competitors don’t get it. You have the answer.

Your team delivers the product in 6 months on budget as planned. Investors are happy with your project management skills and assure you they can help raise more money when needed. It’s now reckoning time. The product is ready and you’re ready to launch.

You start your product launch carefully. Since you don’t have a big budget you prefer to do a soft launch and to get the product into the hands of a few customers. You reach out to the peers in your network, get a few meetings and demos. You are encouraged by the glowing feedback.

Then nothing happens. No sales. No interest. Nothing.

You panic. It must be the price. We must have the wrong sales guys. Marketing is a waste of money. The prospects don’t “get it”.

Money is running out and your team is demoralized by the lack of sales. They doubt your expertise in the problem and the market. Did they just spend 6 months of their lives building a product that no one wants to buy? How could this happen? They feel betrayed.

It’s happening everyday to startups and big companies. And it can be easily addressed by setting aside some of the arrogance and getting out to talk to the market before it’s too late. What is the problem (in their words)? What are they doing to fix it now (in their words)? How important is this problem in the grand scheme (in their words)?

Technorati Tags: product launch

Do you know your buyers? Really?

Successful companies are successful because they have a deep understanding of their buyers and the problems they encounter on a daily basis (not just the problem your product solves). A rule to live by is that a good product manager will know her customers’ problems better than the customer does. And the process of understanding your buyer and the buyer’s problems is a continuous process. Better buyer understanding translates into better products - products that buyers want to buy.

It’s easy to spot a company that knows very little about its markets and its buyers. Their conversations focus on the features of the product. Little discussion is on the buyer and the buyer’s experience. Their explanation of their target markets is broad and lacks details. They use descriptions like “Financial Services” to articulate their target market segment.

Why do companies get into this situation? They have talented engineers designing and building cool products that don’t sell. They resort to discounting, assuming the price is wrong. Some individuals are arrogant enough to believe they understand the problem space based on a single work experience and that talking with buyers is a waste of time. Others are afraid to learn bad news. Still others are blocked by cultural constraints that prevent them from talking with customers. The only way to fix it is to engage in a conversation with your buyers and make it part of your culture.

Many product managers lament that with the demands of their position, they don’t have the time to talk with customers. That is a huge mistake. Marketing leaders know that a product manager that doesn’t dedicate time to meet with buyers is not going to be effective. If you don’t believe this to be true, you may be a conspirator to the problem and don’t realize it. You need to demand that your product managers dedicate a percentage of their time on meeting with buyers. The amount of time can vary but there should be an understanding that a minimum amount of time must be dedicated and it is a priority. When other activities prevent the product manager from meeting with buyers, someone needs to step in and fix it. Quickly.

Steps to a better understanding of your buyers

Call 5 customers each week - if you have a customer base use it. If you’re a startup and don’t have customers yet, reach out to individuals that could be buyers. Start your conversation with “Hi, I’m ________ and I’m a product manager for ________. I’m responsible for bringing new products to market and would like 5 minutes of your time to see if I’m heading in the right direction…”

Don’t lead the witness - when you make contact with potential buyers, be sure to ask open-ended questions that will ensure discussion. Don’t ask questions that will get you the answers that you (or your boss) want. Your goal is to create a dialog that will result in a better understanding of the market and the buyer. The moment you seem to be selling the conversation will end.

Don’t argue - it can be frustrating when the person on the other end of the phone doesn’t “get it”. Consider that maybe you’re not explaining yourself in a way that your buyer understands. Arguing with your buyer or implying that they are wrong is a waste of time. Your goal is to learn.

Document each discussion - who, when, and summary of the discussion. It may be helpful to create an outline to keep you on track and remember what information to capture (e.g., job title, reports to, department, how long in the position).

Attend an industry trade show as an observer - even if your company is not exhibiting. Use the opportunity to mingle, talk with other attendees, visit booths of competitors and partners, talk with analysts and media. You may not get this opportunity for another year.

Block out 1 hour per week researching industry publications - take those magazines and analyst publications and dive in. Tear out the articles and items of interest. Find out what is being discussed and why.

After working in lots of roles throughout my life, I’ve come to appreciate the benefits of working in the restaurant industry more than most from a service perspective. Carfi’s post from Chicago reminded me of that.

I don’t often think back to being a waiter (oh the ramen noodle days), but I do recall getting most of my customer centric approach to service from being a waiter. Loyalty and ongoing spend was more important than the margin of any given interaction. Some things are always transferable and relevant. That being said, this is a under appreciated adage.

I had a job at a Big Boy in Ypsilanti, MI. I mainly liked worked days because I got free food, I lived on slim jims, patty melts and cole slaw. Nevertheless, I was rapidly indoctrinated in the restaurant way of life. The whole essence of a restaurant is service.

This guy who managed me at the big boy – put it fairly well “These people are paying for service or they would have done it themselves – so serve”. That is almost an exact quote and clearly great leadership skills for a bunch of college kids. As a person who loves a good meal and good service, I’ve come to take it almost for granted.

Not only do we take it for granted as consumers, we wildly forget about it in our daily interactions and overall management of our products and businesses. If someone didn’t want service they would do it themselves - hmm.

While not practical in some scenarios - I’m not going to build a car, but I do still buy service when I get a car. Service is a key influencer in buying and the general experience of being a customer is an important part of the product.

Essentially the age old adage of the “customer is always right” may be a concept of yesteryear in many industries and may have never existed in some industries. I mean it wouldn’t be an adage if there wasn’t something to it - right?

The good news is what’s old is new again - the social customer is here!

So what is it that consumers are entitled to? How can a business drive extended value for both themselves and the customer? Loyalty should be a variable for most of your product decisions, but definitely in ALL customer interactions.

The informal word of mouth impact is gaining momentum thanks to web 2.0. With the increasing relevance of social networks, word of mouth is increasingly more important within the corporate decision making process, the customer may be right right again! Back to the future! This whole “interweb” thing is working out.

I know at times it clearly appears the customer isn’t right at the end of quarter or when analyzing margin, but really? To better understand what a social customer is:

THE SOCIAL CUSTOMER MANIFESTO

• I want to have a say.
• I don’t want to do business with idiots.
• I want to know when something is wrong, and what you’re going to do to fix it.
• I want to help shape things that I’ll find useful.
• I want to connect with others who are working on similar problems.
• I don’t want to be called by another salesperson. Ever. (Unless they have something useful. Then I want it yesterday.)
• I want to buy things on my schedule, not yours. I don’t care if it’s the end of your quarter.
• I want to know your selling process.
• I want to tell you when you’re screwing up. Conversely, I’m happy to tell you the things that you are doing well. I may even tell you what your competitors are doing.
• I want to do business with companies that act in a transparent and ethical manner.
• I want to know what’s next. We’re in partnership…where should we go?

I clearly think we are all social customers, perhaps we need to be more mindful social product managers.

On a random note, I’ve been struggling to develop a business metaphor around FIFO. Ideas?

Technorati Tags: customer centric, Big Boy

An opinion editor with the Cincinnati Post has come to the rescue to inform us that we must follow Moore’s Law when it comes to launching new products. Thank goodness he’s is around to set the record straight.

Here is the article in its full glory…

Retail obsolescence

Apple CEO Steve Jobs seems to have stumbled upon an important new economic metric for our technology crazed age.

There are always buyers who want to be the first with the latest, and they are an important market because they will pay a premium to do so. And now, thanks to Jobs, we now know there is a measurable correlation between that premium and the time the product remains exclusive.

The absolute outside limit of desirability for a new technology product has long been believed to be 18 months based on Moore’s Law, propounded by Intel co-founder Gordon Moore, that computer processing power doubles every 18 months - and Moore had to scale that back from his original time frame of two years.

Somewhere in that time line between the day of the product launch and 18 months is the ideal time for a tech company to strike with a premium-priced new product, when the so-called “early adopters” are becoming jaded with the old device and increasingly anxious that somewhere, somebody else is even now buying something way more cool.

Apple introduced its new iPhone, basically your entire life in a handheld device, at the end of June at $599, and around 1 million customers bought them. On Wednesday, Apple announced it was cutting the price to $399 and, moreover, discontinuing its cheaper four-gigabyte model, because who wants four when you can have eight?

IPhone owners were outraged. Apple had miscalculated the zone of exclusivity. Although Jobs accurately if heartlessly told them that somebody always misses the date when the price is cut, Apple nonetheless offered iPhone owners a $100 store credit or a $200 refund if they had bought their iPhone within the last two weeks. The losers with the four-gigabyte model can get a full refund. Some cynics suggested this was all a shrewd ruse to get proven customers back in the stores as the holiday shopping season gets under way, but, as Jobs said, the “technology road is bumpy.” Maybe Apple simply hit one.

Is this guy smoking crack? It would appear that the editor is really a pissed off iPhone owner and wants to inform the world (or at least the citizenry of Cincinnati and northern Kentucky) of the “unjust” practices of Apple. Please. What a moron. Here’s another example of a supposed “expert” distorting Moore’s Law.

If I had the luxury of waiting at least 18 months to introduce new products in my career I’d have a lot less gray hair. Can you imagine what little innovation would occur if new products were launched no sooner than every 18 months? We’d still be using WordPerfect on character based PCs. Steve Jobs hasn’t “stumbled upon” a new economic metric, this has been the norm in technology for over 25 years. Keep up with the class.

Technorati Tags: Moore’s Law